the same thing happened to FNM FRE after the FED stepped in. spike in asia, frank, london. massive fall in america. there is no stopping AIG from sinking in USA. market outlook for finance industry so bleak that it doesnt matter what news comes out. everyone is shorting. even after BAC saved MER, we still shorted the crap out of both.
The bet now is that allowing AIG to fail will cause too much counter party risk of failure as well! The higher than usual volume there echos the high volume here, but this might be a change of sentiment after the ratings downgrade; sort of a sell on the news in reverse!